It all comes down to which plan gives you the services you're most likely
to need at the lowest out-of-pocket cost.

If you get coverage through
your job, your employer picks your insurance and you may or may not get any
choices about it. If you buy your own, you're in charge, but your choices are
limited by the plans available to individual purchasers and by how much you can
afford to spend.

Unfortunately, there's no such thing as standard coverage. Details vary
enormously from one plan to another. The best value is not necessarily the plan
with the cheapest premium or the one with the most benefits. It's the plan that
covers the health services you want and need for the lowest out-of-pocket
expense (see "types of insurance"). In essence, differences among
plans come down to three intertwined elements: benefits, costs and
restrictions.

Benefits: Every insurance plan will cover you for doctor and hospital
bills, with various limits, discussed below under "costs." Virtually
everything else, including prescription drugs, glasses, psychotherapy and
preventive care, such as immunizations and screenings, may or may not be
covered, depending on the specific plan. To figure out how well a plan suits
your needs, first make a list of the health services you and your family
normally use. For each plan, note the amount of coverage for each of those
services -- for instance, "100%," "80%," "not
covered." Once you've got a handle on how fully each plan covers your
health needs, you can evaluate cost differences.

Costs: If you don't use many medical services, your primary cost for
indemnity coverage will be the premium. If you do use a lot of services, it
will be hard to gauge your actual costs, since you must factor in the
deductible, co-payments, and any excess charges or uncovered services. In
contrast, cost is easy to gauge with a true HMO -- a managed-care plan with no
out-of-network option. Once you've paid your premium, nearly everything will be
covered and you'll be liable only for small co-payments. Estimating the cost of
a managed-care plan with an out-of-network option is tricky, because your
ultimate cost depends on whether or not you actually go out-of-network. If cost
considerations make you lean toward a managed-care plan, read its literature
thoroughly to decide whether you can live with the restrictions it imposes.

Restrictions: Generally speaking, a managed-care plan will limit your
choice of providers and require you to get pre-approval for services. If your
beloved pediatrician shuns HMOs or you have a difficult health problem, you may
decide that you can't abide limits like these. Keep in mind, however, that
indemnity insurance also comes with limitations in the form of deductibles,
co-payments and uncovered services. These financial roadblocks can inhibit freedom
of choice as much as any managed-care bureaucracy.

Another worry about restrictions is that many consumers equate freedom of
choice with medical quality. They're not entirely wrong. If you receive poor
treatment in a managed-care plan, it's hard to vote with your feet. However,
they're not right, either. The quality of medical care varies considerably both
in and out of managed care. In fact, the best managed-care plans offer quality
advantages you won't get outside managed care, such as outreach for preventive
services, heath-risk screening and coordination of care.

Whether you choose indemnity insurance or managed care, it's wise to check up
on your providers in advance. One way is via state insurance department
Websites. Florida, Maryland, Massachusetts, New York and Rhode Island, for
instance, post lists of local doctors who have been disciplined for poor
patient care or, in some cases, criminal conduct. New York and New Jersey rate
local hospitals and doctors on how well they care for cardiac patients.
Florida, New Jersey, New York, Maryland, Texas and Utah rate local managed-care
plans. Nationally, the Joint
Commission for the Accreditation of Health Organizations is the major
rating group for hospitals, the National
Committee for Quality Assurance rates managed-care plans and thehealthpages.com lists
surveys and other data on selected health plans and health services. If the
insurance plan you prefer seems unaffordable, check the money-saving strategies
in the next section to see if there's a way to reduce your costs. And be sure
to use our calculator to compare plans that you're considering.